Law and reality in publishing (seldom the same thing) from the author's side of the slush pile, with occasional forays into politics, military affairs, censorship and the First Amendment, legal theory, and anything else that strikes me as interesting.

07 January 2011

Killian Bezos Is Lying to You

After still more Life, I was less than amused to find the following e-mail in my inbox last night.

Greetings from the Amazon Associates Program:

We regret to inform you that the Illinois state legislature has passed an unconstitutional tax collection scheme that, if signed by Governor Quinn, would leave Amazon.com little choice but to end its relationships with Illinois-based Associates. You are receiving this email because our records indicate that you are a resident of Illinois. If our records are incorrect, you can manage the details of your Associates account [link].

Please note that this not an immediate termination notice and you are still a valued participant in the Amazon Associates Program. But if the governor signs this bill, we will need to terminate the participation of all Illinois residents in the Associates Program. After that point, we will no longer pay any advertising fees for sales referred to amazon.com, endless.com and smallparts.com nor will we accept new applications for the Associates Program from Illinois residents.

The unfortunate consequences of this legislation on Illinois residents like you were explained to the legislature, including Senate and House leadership, as well as to the governor's staff.

Over a dozen other states have considered essentially identical legislation but have rejected these proposals largely because of the adverse impact on their states' residents.

Governor Quinn's office may be reached here [link].

We thank you for being part of the Amazon Associates Program, and wish you continued success in the future.

Notice that this never identifies the bill in question? Well, a little research on my part determined that it's Illinois House Bill 3659, Senate Floor Amendment 3, which has been passed and is on the Governor's desk for signature. This amendment would force Amazon to collect use (sales) taxes for Illinois-based "affiliate sellers"  and, most significantly, would not impose a new tax, but would merely require collection of an existing one via the payment system.

This is a stupid policy. It is being put forth as an alleged "level the playing field" provision by brick-and-mortar retailers, who resent having to collect sales tax in Illinois while out-of-state 'net-based retailers don't. (We'll leave aside that the out-of-state retailers must (1) pay taxes where they're located, and (2) don't get the benefit of a lot of the services for which Illinois sales taxes are — at least purportedly, and at least by law — dedicated, such as police protection, fire protection, and our charming local schools.) Further, it is being put forth as a "revenue-enhancer" in a state that has a worse budget crisis than does California... meaning, in turn, that it's at best a bandaid being applied to a gushing femoral artery.

However, not every stupid policy is "unconstitutional." Without explanation of any kind — and, in particular, without reference to the language of the statute, which does pass constitutional muster under Quill1 — this communication just says "unconstitutional." It's not even a close call.

The tax collection scheme would definitely not "leave Amazon.com little choice but to end its relationship with Illinois-based Associates." Amazon already collects sales taxes in other jurisdictions, in particular in Washington State (its corporate home). Many other 'net-based retailers already collect Illinois sales taxes, such as one of my favorite computer hardware vendors. Nothing in the statute would make anything that Amazon does unlawful; it would only require Amazon to do some things it doesn't want to do, and it won't "need to terminate the participation of all Illinois residents in the Associates Program" if Governor Quinn passes the bill.

The real prize, though, is that assertion that over a dozen other states have rejected "essentially identical legislation but have rejected these proposals largely because of the adverse impact on their states' residents." Bullshit. The rejections in question arose from business/chamber-of-commerce/antitax ideological opposition during election cycles, lobbying, and behind-the-scenes logrolling and skullduggery. None of the states in which this legislation actually came to a floor vote had more than token rationalizations entered in their legislative records concerning any purported adverse effect on the states' residents.

If I needed any further warrant for my opinion that Jeff Bezos and his staff either aren't paying attention to whatever competent legal advice that they are offered,2 or are not getting it in the first place (and, based on other recent bullshit from the Big Brazilian River, may not even be asking for it at all), this letter is more than adequate. Even though I'm against sales taxes on principle — they're regressive, inefficient, distortive, and insufficient — I know better than to call something that's administratively inconvenient (and not even that costly to administer) "unconstitutional" just because I don't want to comply with it.

Quill Corp. v. North Dakota, 504 U.S. 298 (1992). In fact, the provisions of proposed § 1.1 of the amendment are substantially less burdensome and overreaching than were the statutes at issue in Quill, particularly given the automated system that Amazon already has in place for calculating Washington State sales taxes...

I have had extensive dealings, and attempts to deal, with the in-house legal staff at Amazon. As a result of that frustration, I have long held, and continue to hold, in-house counsel in less than minimal professional regard. Be that as it may be, one thing that is quite clear is that nobody in-house qualifies as a constitutional scholar...

The Fine Print

Ritual disclaimer: This blog contains legal commentary, but it is only general commentary. It does not constitute legal advice for your situation. It does not create an attorney-client relationship or any other expectation of confidentiality, nor is it an offer of representation.

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Internet link sausages, as frequently appear here, are gathered from uninspected meaty internet products and byproducts via processes you really, really don't want to observe; spiced with my own secret, snarky, sarcastic blend; quite possibly extended with sawdust or other indigestibles; and stuffed into your monitor (instead of either real or artificial casings). They're sort of like "link salad" or "pot pourri" or "miscellaneous musings" (or, for that matter, "making law"), but far more disturbing.

I am not responsible for any changes to your lipid counts or blood pressure from consuming these sausages... nor for your monitor if you insist on covering them with mash or sauce.

Blog Archive

Warped Weft

Now live at the new site. I have arranged some of the more infamous threads that have appeared here by unravelling them from the blawg tapestry (and hopefully eliminating some of the sillier typos). Sometimes, the threads have been slightly reordered for clarity.

Other Blawgs, Blogs, and Journals

These may be of interest; I do not necessarily agree with opinions expressed in them, although the reasoning and writing are almost always first-rate (and represent a standard seldom, if ever, achieved in "mainstream" journalism). I'm picky, and have eclectic tastes, so don't expect a comprehensive listing.

How Appealing is aimed at appellate lawyers and legal news in general. If you care about the state of the law, start here — Howard's commentary is far better balanced, better informed, and better considered than any of the media outlets. To concentrate on the US Supreme Court, don't forget SCOTUSBlog.

Some academics' blawgs with a variety of political (and doctrinal) viewpoints:

The main European IP blawg of interest remains the UK-based IPKat, on a variety of intellectual property issues, with some overlap (with a less Eurocentric view) at IPFinance

The American Constitution Society blawg is a purportedly "liberal" counterweight to the so-called "Federalist Society" (which, despite its claims, should be called "Tory Society") that has yet to establish much coherence... but maybe that's all to the good.

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